2016 Year End Review

According to my brokerage account, I was lucky enough to have earned 19% despite having a bumpy opening to 2016.

But that’s not the greatest achievement, at least not for me personally.

I was able to get both my middle sister and my cousin started in investing, and did it through a disciplined approach.

And to get them to invest, I told them I would do the same thing alongside with them so that we’d be on the same ride together. Feel the pain and the celebrations together.

Disciplined Investing

Our disciplined approach was this:

Use Robinhood as our brokerage. Having no commission fees appealed to them since they’re younger.

Set up Robinhood to automatically deduct funds from our bank account at the beginning of every month. For me it was $400. For them it may be less, depends on their salary of course.

Periodically buy funds for our account.

Only buy two funds: SPY and BND.

We would attempt to have a 90/10 asset allocation (stocks to bonds). To accomplish this, we would purchase different amounts of SPY and BND every month. Usually either 1 SPY and 1 BND or 2 SPY and 0 BND. This way, in the long run, we can manipulate our portfolio into having 9 SPY and 1 BND, or a 90-10 asset allocation.

We started this towards the later end of 2016 and as of January, we’re still slowly buying up more shares of SPY in our taxable account.

My sister is excited to see an incoming dividend payment into her account as she’s never had that before. It’s very rewarding to get the little ones involved in investing, especially with small amounts and since they’re still young with a long road ahead of them.

Sharing Portfolios

To simulate portfolios, she and I use http://hellomoney.co in order to create and share portfolios. She creates her current portfolio on there and sends it to me. I make changes and send it back to her.

Her portfolio was up a lot last year from just purchasing a few stocks and holding. Being 16% up has made me extremely proud of her for stepping into the world of investing and outperforming not just the market, but most other active investors. She combines both her own stock picks along with indexing to ensure diversity and a chance to out perform the market. This is still her first year in the market and she has lots to learn, like the redundancy of some of her picks, but perhaps she knew those stocks would outperform :p

Another note: I’ve switched brokerages at the end of 2016. I’ve decided to move over to Interactive Brokers since they have extremely low fees for trading.

TastyWorks sent out emails announcing their release this week. I signed up as soon as they announced it a few weeks ago but there wasn’t yet a release date set in stone. Luckily, TastyWorks sent an invite pretty quickly to open up an account. And since they have similar fees to IB, with a much nicer platform, I’ll be switching yet again (lols..)

For those interested in seeing the Tastyworks demo, they archived their video of it here: